It was only a few years ago that the typical expatriate postings for Australian corporate employees were New York, London and Singapore.
Not anymore. If you’re in an Australian corporation with offices overseas, you are increasingly likely to be sent to Africa, Asia or the Middle East as businesses seek to benefit from those regions’ cheap labour, economic growth and mining opportunities.
According to EY Human Capital Partner Kathleen McCombie, here are the top 5 emerging expatriate destinations for Australian professionals:
Today’s overseas postings are primarily driven by companies wanting to expand into new markets.
EY reports that 48% of companies surveyed in 2012 increased the numbers they sent overseas to emerging markets including Africa and BRIC, and assignments to those countries are expected to increase by up to 56% in 2015.
China was the most popular emerging market for expatriate postings in 2012. McCombie said the number of Australians working in China had grown steadily in the past 5 years.
Expatriates living in China tend to be in either senior, strategic or managerial roles (39%), project-based work (35%) or on business development assignments (24%).
Just under half (44%) the postings are for 12 months or less, and opportunities tend to range from financial sector jobs, mining and real estate.
McCombie said a majority of Chinese-Australian expat contracts were three-year placements that included housing, education and tax equalisation allowances.
But Australians sometimes found it difficult to adjust from larger, Australian houses to Chinese apartments, and international schools have been in high demand since the GFC, she said.
Australians tend to be posted to African countries like Congo and Cameroon to oversee mining projects or work in support sectors.
EY reports that 38% of expatriates posted to Africa in 2012 were there for project-based work, while 35% were in strategic or managerial roles and 23% were there for developmental reasons.
McCombie said African postings had become increasingly common in the past 3 years, as companies recognise the region as “the next big source of cheap labour”.
She warned that security tended to be the primary concern for many companies and expats – so much so that many Australians left their families behind.
“It’s usually a remote location for families and there are no well-established expat communities,” she explained.
To compensate, African expatriate postings typically come with an extra cash incentive of 30% of the employee’s salary or higher.
Australians overseeing operations in Africa may also be placed in the United Arab Emirates city of Dubai, which has become an increasingly popular expat destination in the past 5 years thanks in part to new flight routes by the likes of Qantas.
“It’s quite a booming economy,” McCombie said, adding that many Australians were moving to Dubai on their own steam – without a company posting – to benefit from the Emirates’ zero tax rate on personal incomes.
Most Australian expatriates tended to work in construction or financial services sectors because “foreign or Australian project managers are highly regarded” by local firms, she said.
However, immigration can be an issue for non-married couples and anyone moving for tax reasons should be aware of the ATO’s definition of tax residency status, which determines whether Australian tax applies to someone working overseas.
Companies doing business in South East Asia have been sending staff to live and work in Singapore and Malaysia for some time. Now the focus has shifted to Vietnam, which has become an emerging expat destination in the past 3 years.
McCombie said placements in Vietnam typically spanned 2 to 3 years in a range of industries like construction, finance, aviation and mining.
Common issues included smaller houses than those Australians may be used to, and poorer quality services and utilities like electricity.
“That tends to put stress on the spouse,” she noted. “One of the most common reasons for failed assignments is family issues: settling into schooling or [the spouse] feeling isolated.”
5. The Philippines
With an educated, English-speaking population and low cost base, the Philippines has grown in popularity among Australian companies – and expatriates – in the past 1-2 years.
QBE and ANZ are two Australian giants with significant operations in Manila. QBE CEO John Neal has described the move as “labour arbitrage” because of government tax incentives and the availability of cheaper, qualified workers.
McCombie said the Philippines was on its way to overtaking India as an Australian expatriate destination, especially for companies that are newly looking to offshore operations.
She said Australian expatriates tended to be posted to the Philippines to lead professional services teams, using local staff to resource projects.